Knight Frank Global House Price Index puts Latvia on top
Well seeing as its Friday, I plumped for a little light reading…so bring on the property stats.
This week saw not one but two releases on overseas property investment related data. 
Firstly estate agent Knight Frank’s research guru Liam Bailey, is the man behind its new Global House Price Index which published yesterday which has Latvia, despite it being a 2 or 3 year old market, as Number 1 on a 30-nation league table for capital appreciation. “Jet-to-let is the new buy-to-let,” commented Bailey, in an article in the Telegraph which reflects the British high risk high reward obsession for finding property investment bargains in increasingly unusual locations…
According to UK indicators, millions of Brits own second homes abroad and this is reinforced by stats from the Department of Pensions which show 871,000 Britons permanently draw a state pension from overseas. This figure discounts those below pensionable age or without the need to take a pension also living abroad.
We’ve said it more than once here on Nubricks.com, property and more so property overseas has shifted to become an asset class over just an alternative investment, driven by wealthier individuals the attracted by a dual-performing asset over stocks and shares thus spawning an incessant search for the ‘next undervalued global hotspot’ all hoping to buy into a real estate boom time.
Knight Frank’s league table other eastern European stars include Bulgaria and Estonia, up 20.5 per cent and 12.9 per cent in the past year, with South Africa the furthest-flung just making it into the top 5.
There are some locations such as Slovenia and Slovakia which require a bit more analysis but look set to become a hotspot of the future based on long term growth prospects. In western Europe Germany seems to be the top of most people’s list at present based on predicts of sustained house price growth over the next few years
The table below shows the annual percentage growth from Quarter 2 2006 and from Quarter 2 2005
Latvia: 73.5/45.3
Bulgaria: 43.8/20.5
Denmark: 15.3/15.4
Belgium: 18.9/14.9
South Africa: 25.2/14.3
Estonia: 19.9/12.9
Sweden: 7.7/12.8
Canada : 9.5/11.8
Greece: 10.4/11.8
New Zealand: 13.4/10.6
US: 14.1/9.4
France: 15.3/9.4
Ireland: 10.1/9.4
Spain: 14.0/8.5
Lithuania: 21.7/7.0
Finland: 4.8/6.7
Norway: 9.1/6.4
China: 8.0/5.8
Singapore: 2.4/5.7
Italy: 11.2/5.2
Hungary: 1.3/4.9
UK: 6.1/4.8
Australia: 1.9/3.7
Switzerland: 0.8/3.4
Austria: 3.9/3.2
Netherlands: 4.4/2.0
Germany: 0.2/0.5
Hong Kong: 22.5/-2.4
Japan: -4.8/-2.7
Serbia: -14.8/-5.1
Turning to trend watching we reported earlier the week in one of our posts on Morocco new developments that the Travel experts at Opodo identified their ‘Top 10’ up and coming travel destinations, for travel in 2007, which as we all know are a great way for spotting a future potential property hotspot.
Knight Franks findings tally up with Opodo which stated “2006 has seen a strong rise in travel to Eastern European countries since whilst being accessible, they still hold a certain ‘mystique’ for the traveller. Bookings to Bulgaria have risen by 40% in the last 6 months and with the prospect of joining the EU in January ’07, we expect to see a significant increase in the number of tourists heading there to take advantage of the Euro. Russia will also continue to grow in popularity for those looking for their next Eastern European adventure, an insight which is
apparent from the 24% increase in bookings so far this year.”
Opodo also predicts Morocco will also become one of the biggest tourist hotspots of 2007. A combination of affordable boutique-style and low cost travel there the country is much more accessible than before. The appeal of places like Morocco is such that tourists can quickly immerse themselves in another culture.
Looking further afield Opodo is the only major European online travel provider who sells Cuba as a destination and has already monitored a steady growth in bookings over the past 6 months.
Less well known Caribbean and South American countries such as Brazil make good investments, especially for holiday homes as prospects in areas with high levels of tourism are generally a good bet. Undiscovered and unspoilt are the qualities that many intrepid travellers are searching for these days.
There are many that feel destination such as Australia and New Zealand will attract more permenant residents than holiday home buyers but with the advent of the A380 lauch, the capacity may result in a rapid increase in tourists travelling longer-haul due to cheaper airfares.
World Sporting events are also another good property indicator; the 2008 Olympics will draw tourists to China, while the 2010 FIFA World Cup should help South Africa to put itself on the property map.
OPODO’s TOP TEN HIT LIST FOR 2007:
1. Bulgaria
2. Russia
3. Morocco
4. Cuba
5. Australia
6. Brazil
7. India
8. Dubai
9. China
10. South Africa
